Why I had to hide the TV from my cousin: Taxi driver riots and the Parisian hotel industry have the sharing economy/l’économie collaborative in common

One morning last summer my adorable cousin Kimberly and I sat down to breakfast. The TV showed a scene from Paris–a car overturned, tires burning, men milling about in the center of a road. I carefully maneuvered myself so that she wouldn’t see it–I didn’t want her to get scared, and since she doesn’t speak French, I knew that if I could just block her view of the TV, she wouldn’t understand what the announcer was saying.

The story was about the taxi driver riots that were taking place in Paris that summer. Taxi drivers pay 200,000 euros a year for a license to operate in France. Uber drivers pay nothing. The taxi drivers were protesting against this imbalance, which allows the Uber drivers to out-compete them, hands down, and the taxi drivers could point to a 30-40% drop in revenue over the past two years as evidence. France is into nothing if not fairness (the motto of the country is Liberté, Egalité, Fraternité–liberty, equality, fraternity), and this struck the taxi drivers as patently unfair. The government basically agreed, and Minister of the Interior Bernard Cazeneuve requested a crackdown on Uber by the police in Paris. The struggle between Uber and the taxi drivers continues–Uber continues to operate with greater or lesser interference in various parts of the country, last year two high-ranking Uber executives were arrested, Uber drivers have begun protesting (the national sport of France, after soccer and flirting) against the government, and today Uber shut down services in Paris for four hours in support of the driver protests.

This is just one example of how the new sharing economy–économie collaborative–is affecting France. France’s heavy involvement in the business world, which an American antitrust lawyer described to me as anti-competitive, has had the salutary effect of keeping small businesses alive and well in France during the same period that they have been crushed in the United States by what we call here in America “big-box stores“–Walmart, Target, Best Buy, and the like. It’s unclear where the sharing economy, with its typically person-to-person transactions, typically carried out through some sort of electronic platform, fits into the French economy, but it’s clear that it is bothering some traditional businesses. For example, the hotel industry is up in arms about Airbnb, whose second-biggest market worldwide is in Paris, with 50,000 units available; 3.9 million people used it last year, contributing 2.4 billion euros to the French economy. Complaints come from the hotel industry, which claims unfair competition due to the fact that Airbnb hosts don’t have to charge taxes (Airbnb has now started to collect them from renters), as well as from regular citizens, who point out that so many properties around the country are now being rented out on Airbnb on a full-time basis (the law allows 120 days a year) that it has severely cut into the housing market for French citizens, which is already tight as hell in Paris.

The économie collaborative was this morning’s theme on the radio show that I listen to on the way to work in the morning. Here are some of the words from the story that I had to look up:

or: but or yet, when introducing an opposition, specifically. Here it’s the opposition between giving (le don) and capitalism.

Postscript: After posting this, I got the following feedback from the antitrust attorney who I mentioned above.

FWIW…I think the Uber and air bnb issues are very different from mom and pop v big box. In the former, essentially the same thing is being offered to the consumer, but the government has created an unlevel playing field that prevents the taxed and regulated providers from competing effectively. The playing field may not be level in the other arena either, but (1) the govt isn’t causing that…economies of scale are and (2) mom and pops offer something different than big box retailers…the products might be the same, but service is different. Mom and pops go out because not enough people care about service to pay for it. The masses care only about money. The playing field isn’t level in the mom and pop/big box scenario, but market forces and customer choice have created that disparity rather than governmental regulation. Very different. I hate hearing people gripe about mom and pops struggling as they walk into Home Depot because it’s cheaper or they can get something faster than when pop had to special order for it. If most of society cares only about cost, there’s no place for independents and it is not the fault of the big boxers.

4 thoughts on “Why I had to hide the TV from my cousin: Taxi driver riots and the Parisian hotel industry have the sharing economy/l’économie collaborative in common”

Same story here in Italy, though protests haven’t been violent. So far. Fairness is one thing, but freedom to move ahead to new business models and user-friendly services (=cheaper) shouln’t just be stonewalled. The sharing economy is one way ahead.

I understand it’s a question of rules, but in the long run, I think over-regulated EU countries are heading the wrong way and will find it more and more difficult to cope with modern-day markets forces. I’ve never used Uber but hear the service is pretty personalised, I did use airbnb last year in Boston and found the quality and personal touch (=service) were excellent … and not all that cheap. If you want to create more jobs and opportunities for the many, you have to think differently from the last 100 years.

I’m guessing that the way that this is going to go is that 3 years from now, all taxi companies in the US and Europe will be using apps that are just like the Uber app. Uber is typically cheaper than a taxi, but it’s definitely not always cheaper than a taxi. The advantages come from the Uber app–it tells you exactly where the car is, how long it will take for it to get to you, and approximately how much your trip will cost. Taxi companies could offer the same, and they’d be crazy not to, now that it’s not difficult from a technological perspective. Hopefully the hotel industry will go in the direction of Airbnb–rationalized prices; easy comparison shopping not just in terms of prices, but in terms of features; features that make hotels less of a commodity and more of a boutique experience. Hotels can and do offer better service than Airbnb does–if they can catch up with the technology, I would guess that they would outperform it.